2015 Nonwovens Sales: $254 million
Frantisek Rezac, CEO; Frantisek Klaska, CTO; Marian Rasik, CFO
Znojmo and Bucovice,Czech Republic; 6th of October City in Egypt
Spunbond, meltblown, SMS, bicomponent
Hygiene, agriculture, healthcare, ecology, furniture, building, protective apparel, industrial
Pegas Nonwovens, the Czech Republic’s largest nonwovens producer, reported record sales and volumes in 2015. Sales reached $254 million and volumes exceeded 100,000 tons. Although the company’s entire production capacity is sold out, growth came through optimization and efficiencies achieved in the production process of the company’s current lines, CEO Frantisek Rezac says.
With nine lines in the Czech Republic and one in Egypt, Pegas decided in June to position its next investment in a new warehouse at its site in Znojmo-Prímetice, Czech Republic. The company originally planned to install the new line, a S-TwinMB-S 2600 Reicofil 4s Compact bicomponent line capable of making about 10,000 tons of material per year, at its site in Cairo, Egypt, but later reconsidered.
“The decision to locate the new production line in the Czech Republic was based on a number of factors, primarily, though, on the product mix development and the related expected commercialization of several technical projects that necessitate the installation of specialized technological equipment,” Rezak says. “Of no less importance is the development of the demand situation in Europe and the lack of production capacities in the Czech Republic, that would enable us to meet this demand for technologically advanced products.”
In September 2015, Pegas announced it would add a new line to its Egyptian operation, which currently houses one line. Pegas established this operation—its first outside the Czech Republic in late 2011, reportedly at the request of a major customer. While no expansion plans are underway for now, Rezak says he remains bullish about this operation.
“We are satisfied with the performance of our Egyptian line. It successfully ran in standard commercial production mode for the entire year of 2015 and met our expectations,” he says. “We have always proclaimed that we intend to further expand the capacity in Egypt. The question is the timing of such an expansion.”
In other expansion news, in June Pegas’ board of directors voted to establish a South African subsidiary, which is the first step in purchasing land there. While it is early in the process, Rezak has said that the establishment of this company will likely lead to another production plant—likely featuring the same Compact technology going into the Czech Republic—outside of the Czech Republic.
“Due to its lower overall investment costs, lower demands on infrastructure and lower capacity, (Compact) represents a platform which is suitable for penetrating into new, especially developing markets,” he says.
In the meantime, Pegas is negotiating with customers that have expressed an interest in this region, with the objective of filling the new line’s capacity. A final decision on the line should be made by mid-2017.
Strong customer relationships, allowing Pegas to gauge market needs and demands, in fact, is one of the company’s biggest strengths, Rezac concludes. “This enables us to specifically address the clients’ needs and come with solutions that bring benefits to our customers,” he says. “We constantly aim to improve and enhance our products and look for new solutions in order to satisfy the needs of our customers.”